Report: Cuts to childcare makes program 'cost-prohibitive'

CHARLESTON, W.Va. -- A new report on childcare assistance said West Virginia officials may have made the Temporary Assistance for Needy Families program "cost prohibitive" when they raised parents' co-payments for the program in August.

In West Virginia, TANF provided needed financial assistance to more than 24,000 young children in 2011 whose parents had jobs or were attending school. Daycare is one major service provided by TANF.

In July, Gov. Earl Ray Tomblin ended an enrollment freeze to get children into the program, but did not reverse recent financial cuts initiated by the state Department of Health and Human Resources.

The West Virginia Center on Budget and Policy just released a new study -- "Reducing Child Care Assistance: The Impact of West Virginia's Low-Income Working Families" - that details benefits the TANF program provides to some of the state's poorest families, especially single mothers.

Ted Boettner, author of the report and executive director of the Center on Budget and Policy, said, "Child care assistance is crucial to keeping low-income parents in the workforce and their children safe.

"Instead of cutting child care assistance, we should follow the lead of other states that have invested additional resources into the program."

On August 1, West Virginia significantly raised parents' co-payments into the program.

A single mother earning $15,130 a year -- which is 100 percent of the poverty level as defined by the federal government -- found her co-payments increase from $29 a month to $115 a month, according to the Center's report.

That mother's childcare costs increased from 2.3 percent of her monthly income at the beginning of 2012 to 9.1 percent today.

"If costs become too prohibitive," the report continues, "some parents will likely have to stop working in order to stay home and care for their children."

In some cases, parents might leave their children home alone, if they cannot afford to pay for childcare.

Today, parents whose income is below 150 percent of the poverty level can enroll children up to 12 years old for TANF benefits. West Virginia's income eligibility level is lower than 34 other states.

Parents can enroll children with serious physical disabilities or psychological problems up to the age of 18.

Today, the average cost for full-time care for an infant in a West Virginia childcare center is $6,932. For that single mother earning $15,130 a year, that would come to nearly 46 percent of her annual income.

On January 1, families whose incomes range between 150 percent and 185 percent of the poverty level will be removed from eligibility for child care benefits. West Virginia already has the nation's 16th lowest income eligibility level.

That cut is projected to save the state $4.5 million a year.

Like most states, West Virginia is already probably "serving only a fraction of families that could potentially be eligible for assistance," according to the Center's report.

Last year, childcare services in West Virginia provided jobs to 5,957 workers, according to Workforce West Virginia. Additional jobs are created in other businesses that supply goods and services to child care facilities, such as food vendors.

The Center's new report urges the state government to find new sources of income to continue financing child care facilities, including using money from the Rainy Day Fund or creating other funds, such as by raising taxes on tobacco products.

This year, West Virginia has nearly $898 million in its Rainy Day Fund, making it the second largest in the country.

The state could also create a new childcare tax credit to cut down the costs for the poorest West Virginians, the report states.